raterival b Flashcards
what is a contra asset account
its when the natural balance of a account is either zero or negative
what type of account is accumulated depreciation
because its the depreciation of a thing that provide the business value its a asset but since the value of the asset is a negative it is a contra asset
what is the contract based accounting approach
this only takes into account the contract and changes in the contract and the contact itself(basically just looks
what does a closing entry do
it resets the the temporary accounts to zero and updates the balance in the retained earnings
what is a corporation whos shares are held by a small number of individuals
privately held corporation
what should a accounting systems chart of accounts include
a numerical identifier
is earning interest considered a investing activity
no but getting the good that earns the interest is considered a investing activity but the intrest its self learns closer to operational shit
what will a deposit be considered as under the accrual basis
its considered as a liability because the work that needs to be done for the deposit still needs to be done
what is a deposit considered as under the cash basis
revenue since cash basis only looks at the movement of cash in a organization
what is the accrual basis of accounting
it matches revenue with the work needed for the revenue hence why deposits are liability and accounts payable are asset
what is the cash basis of accounting
its strictly looks at the movement of cash in and out of the company
what is factoring
its when a company wants to shorten its cash to cash cycle and it sells its accounts receivable
why does prepaid insurance almost a debit balance
because if you owed insurance then it wouldnt be a negative credit balance instead the insurance payable account would be debited
what is expenses by function and why does our university repot this way
its when the business groups the expenses by similarities
why would a car dealership use the specific identification method
because each car has its own unique value since there all likely different in there own value
